A landmark judgment has ruled that employers do, in principle, have the right
to retire older workers. But will employers bring back the mandatory
retirement age?

If anyone needed any more convincing that the constant tinkering of employment rules gets in the way of business growth, they need look no further than the UK's retirement age law.

Over the past 18 months, retiring someone purely because of their age has gone from acceptable, to semi-acceptable for certain age groups, to completely outlawed and unacceptable, to acceptable once again as long as you can justify it.

The latest ruling from the Supreme Court says employers are within their rights to dismiss older workers, as long as they have a "public interest" defence. This could be making way for more entry-level jobs and younger staff climbing the career ladder - deemed to be in the public interest at a time of high young unemployment.

It is the first time the "public interest" defence has been applied to age discrimination law, legal experts said. It's pretty unusual.

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Employers can now bring back the mandatory retirement age despite the practice being outlawed by the coalition last October.

In theory, this could help struggling businesses who feel they cannot afford to keep older workers on past the age of 65 and want to create opportunities for younger people.

As Rob Eldridge, an employment partner at law firm Berwin Leighton Paisner says: "The Supreme Court has thrown a lifeline to those businesses that see their staffing arrangements to be better supported by the retention – or even reintroduction – of a mandatory retirement age."

But the Supreme Court ruling on Wednesday only said it was acceptable for law firm Clarkson, Wright & Jakes to force its partner, Leslie Seldon, to retire - not that it was right to make him leave aged 65. The ruling said it is possible to justify a retirement age, not this retirement age of 65.

The Seldon case is going back to tribunal for clarity on this point - and presumably it will be months, if not years, of more wrangling and tinkering over the ins and outs of the law.

As Howard Hymanson, head of the employment group at law firm Harbottle & Lewis, points out: "It may not, for example, be appropriate for an employer to adopt a single retirement age across the entire workforce, particularly where there is a wide range of different jobs being undertaken,such as manual versus clerical, and where there will presumably be different considerations to take into account.

"It is clear that there is no quick fix for companies in deciding how to deal with an increasingly older workforce and that the issue of justification where a set retirement age is imposed, will continue to be the subject matter of future litigation.”

Employers who have concrete evidence that they regularly promote younger workers into senior roles stand a good chance of using the public interest defence, should they want to use a retirement age.

This is because it is in the public interest to give young people opportunities that would otherwise not be there (if older workers remained in post) at a time of high youth unemployment.

However, those companies who have no problem attracting younger workers into posts, despite a high number of older workers , may have a harder point to prove. These are all points to be argued out in test cases.

Employment lawyers have warned there is still a long way to go before companies have clarity on the circumstances under which forced retirement will be allowed.

The CBI has called on the Government to "fill the vacuum" left by the removal of the retirement age last year.

Neil Carberry, CBI director for employment, said: “If employers want to set a retirement age that is suitable for their workforce, and know for sure whether it is legitimate, they will still have to go through a costly and lengthy legal process.

“The Government cannot continue to pass the buck. Employers need to know how to handle the sensitive issue of retirement, with adequate protection to discuss plans with their staff, and better guidance on when a retirement age is justifiable.”